The Supply Chain is Strained. Technology Can Help.

E-commerce is one of the few industries which has seen growth during COVID-19.

The pandemic has been impacting the world for approximately 15 months. Through that time, e-commerce has exploded to the tune of 4 to 6 years’ growth. The numbers are staggering:

• U.S. consumers spent $861.12 billion USD online in 2020; a 44% jump from 2019. Worldwide, consumers spent $4.28 trillion USD on e-commerce.
• Online spending accounted for 21.3% of all retail sales in 2020.
• Before the pandemic, 8.28% of U.S. households received 10 or more e-commerce deliveries per month. During the pandemic, that number has doubled to 16.1%. And homes expecting 6 to 10 deliveries also jumped from 10.2% pre-pandemic to 26% currently.

The increase in e-commerce plays a central role in the latest SOTI report, Mobilizing the Delivery Workforce: State of Mobility in Transportation and Logistics. Supply chain organizations have had to deal with a sudden surge in demand, while being bound by existing systems which may not be able to handle the additional pressure.

Coupled with trying to safely navigate the pandemic world, the T&L industry is facing some unparalleled challenges and leveraging technology to overcome them.

More Deliveries Mean More Returns. Or Does It?

Even before the pandemic, business models were shifting rapidly. To overcome barriers to purchase, many e-commerce providers implemented a “try-and-return” model: Buy an item and have it delivered to your front door. Don’t like it? Just send it back.

With the pandemic, 37% of e-commerce providers have seen increased demand for deliveries or returns.

But how returns are handled isn’t always efficient. Here’s what some global consumers think about the return process:

• Canada: 65% of consumers want retailers to make returns easier and faster for them.
• Sweden: 53% say the industry should invest or use technology to simplify the returns element of the e-commerce experience.
• Germany: 50% of consumers say returning purchases isn’t as easy or automatic as it should be.

During the pandemic, the average e-commerce return rate is 30%. Before the pandemic, it hovered around 25%.

To ease pressure on the supply chain, retailers are investigating allowing customers to keep items they aren’t satisfied with. Although this may not make good business sense – 67% say this policy would have a negative impact on their operations – it is being considered by many to ease the supply chain strain.

As a result, 72% of T&L companies are working directly with e-commerce providers to explore new ways in which they can handle returns from consumers more effectively. That could mean:

• Having T&L providers come to the house to pick-up unwanted items.
• Scheduling curbside returns.
• Tracking when a truck is in the area and requesting it make a detour to the customer’s home address for pick-up.

For years, the supply chain went in one direction: from the warehouse to the end destination. Now it’s expected to operate in the reverse. For T&L companies, does that mean putting more vehicles and drivers on the road (keeping in mind the road freight sector is responsible for over 24% of CO2 emissions worldwide)? Or does it mean optimizing operations to ensure efficiency and speed of service?

Customers Don't Care That the Supply Chain is Stretched. They Care About Convenience

With consumers ordering everything from groceries to clothing to electronics to school supplies to cleaning items to toys and games to medications, it’s up to T&L organizations to deliver them safely and on time.

In the pandemic world, it’s now up to the T&L industry to help customers return items they aren’t happy with. And, of course, the process must be seamless, convenient and free (16% of e-commerce retailers collect fees for return shipments).

Prior to the pandemic, over 60% of consumers reviewed a return policy before making a purchase. No doubt, that number has increased due to the restrictions imposed by COVID-19. To meet these pressures, the sector must identify the gaps in the return process and leverage technology to fill them.

Mobilizing the Delivery Workforce: State of Mobility in Transportation and Logistics investigates where these gaps are and how mobile technology, combined with an integrated business-critical mobile strategy, can help deliver on consumer expectations while easing pressure on the supply chain and its workers.

It’s a must-read for any T&L organization looking to see performance gains as they navigate the new challenges brought on by the pandemic.